Tax-related identity theft happens on and offline

March 1, 2017

By Tiffany Roussel, Tax Administrative Supervisor

The importance of cyber security and risk of identity theft have been magnified in recent years. Proactive businesses have taken measures to secure their data including establishing firewalls, installing anti-virus protection, mandating strong password requirements, and educating system users to be wary of strange email – and these measures are necessary. However, an older identity theft technique is popping up this tax season in the form of mail fraud.

An individual reported not receiving mail for several days in the month of January 2017 when tax filing paperwork was expected to arrive. They discovered someone had set up a new forwarding address with the post office online in their name. All their mail, including sensitive tax documents with Social Security numbers (SSN), was sent to a stranger who then applied for credit using their identity. Had their W-2 not been returned to their employer (W-2s cannot be forwarded), it is possible a fraudulent tax return could have been filed in their name as well. This is happening across the country, and no one is immune.

Identity theft happens both on and offline, and it is imperative individuals take all necessary precautions to protect sensitive information. One way to avoid theft of your tax return is to file as soon as possible. If you or your spouse’s SSN is used as part of a fraudulent return, the Internal Revenue Service (IRS) will issue an identity protection PIN (IP PIN) for all future returns. Without this PIN, a scammer will be unable to file a return in your name.

Remember, IRS requests related to identity theft will arrive via mail and will either ask you to call a number or go online to IDVerify.irs.gov to confirm your identity. You will only receive this request if the IRS suspects the return being filed is fraudulent. At Honkamp Krueger (HK), we will complete the IRS Form 14039 (ID Theft Affidavit) if your return rejects because a fraudulent return has already been filed with a taxpayer or spouse’s SSN. Additionally, purchasing HK’s audit protection plan will cover any costs incurred from our time spent handling the rejection, responding to the notice, consulting, etc.